Countrywide Crushed Again (Lost another 16% of their stock value to Ditech)

http://www.thestreet.com/s/countrywide-crushed-again/newsanalysis/banking/10373527.html?puc=_dm ^ | 8-10-07

[org.whodat]

What does this mean for those of us with countrywide mortgages?

Not much, they generate mortgages and service them, they don't hold the paper.

[stefanbatory]

one of my investment properties has a 80% fixed and 15% that is a Home Equity line with Countrywide...one of these days I’ll pay off that HELOC...give countrywide a little more cash to play with...

[RGSpincich]

Too bad. Countrywide has always treated me right. Can’t say that for any of the others I’ve used.

[cgbg]

The reason I am convinced that we are headed for a major recession is that refinances have generated cash for consumers over the last few years--that economic driver just isn't going to be there in the next couple of years.

[KarlInOhio]

ARM’s still can’t adjust beyond their parameters - i.e., the margin and index. The only way this affects ARM rates is if the indexes like MTA, LIBOR, and COFI go up, and, if anything, they’ll probably go down once all this hubbub calms down.

How many of the ARMs' initial rates were far below their index rates, so that even if the market rates stay the same the mortgages' rates are guaranteed to go up? My first car loan was a variable one like that. The initial interest was 9% (decent for a kid still in college), then it jumped to 14% three months later because it was set to be some percentage above an index which had absolutely nothing to do with the initial 9%.

I have avoided variable rate loans since then.

[ichabod1]

Aren’t they really, really BIG? And respectable? Like Enron? How can Ditech be cleaning their clock? I thought they were just a scam, though since they were bought by GMAC I had to figure they were a playa.

[RockinRight]

Most hybrid (3/1, 5/1, etc) ARMS are like that.

All I meant was what happened the last few days won’t make a 3/1 ARM that wasn’t supposed to adjust till June 2008 suddenly adjust now, nor will it take a margin of 2.25 over LIBOR and suddenly make the margin 3.5. Even ARM mortgages have contractual obligations.

[RockinRight]

The “Ditech” thing is a joke, I think. I bet their stock isn’t doing that great either.

[ichabod1]

Still, one reason I like being with them is because I don’t think they’re a here today, gone tomorrow sort of company. Also, a friend from church was my broker and got me a nice 6.25% rate and hooked me up with a wonderful real estate agent. But if they’re shaky it’s going to cost them in their ability to sell new loans.

[RockinRight]

Countrywide, Wells Fargo, B of A, Indymac, and Wells Fargo will all be OK. They might take a crunch, but they’ll survive just fine.

[tx_eggman]

resetting ARMS (based on higher interest rates which reflect the perceived risk in the mortgage market) in the next few months will affect a lot of middle class folks with decent credit

Making the 5.25% - 30 year fixed I've got look like one of my better financial decisions ...

[econjack]

...the government didn't bail out the S&L's.

You still don't get it, do you? First, Congress had to appropriate over $30 billion to bail out the S&L's. This was because the insurance premiums paid by the S&L's to insure the deposits was inadequate to cover the losses. This means they used MY money to pay off bad loans made by the S&L's. That's a bailout. Second, I'm not sure I even agree with the gov't being in the insurance business. Why am I paying Nagin to rebuild New Orleans? I don't see them coming to Indiana to rebuild here after a tornado. To me, that's a bailout for NO. You can call the payments to the S&L's whatever you want, but when they come into my pocket to seek federal tax money to pay to private companies, that's a bailout.

[visualops]

Gawd just get their incessant commercials off my TV with that obnoxious ugly guy. And quit wearing a button down shirt with a suit jacket and no tie, it looks terrible!

[Hydroshock]

To me as well this is a bail out. And there will need to be more to feed this beast.

[Strutt9]

"Still, one reason I like being with them is because I don’t think they’re a here today, gone tomorrow sort of company. Also, a friend from church was my broker and got me a nice 6.25% rate and hooked me up with a wonderful real estate agent. But if they’re shaky it’s going to cost them in their ability to sell new loans."

Agreed, they are a pretty good company to deal with. I don't believe they are that shaky... granted they will have to eat some of the subprimes that they wrote via other mortgage/broker but they have enough cash to withstand it.

[Moonman62]

Like your opinion matters to me, though it makes me more confident that I’m right when you disagree. I get really concerned when you agree ;-)

[texastoo]

We all remember. The government bailed out the S & Ls.

[Hydroshock]

This is another bailout and it will only make it worse.

[Orange1998]

WSJ: “ A crucial date could be Aug. 15. That is 45 days before the end of the third quarter, the date when investors in many hedge funds can give notice that they are pulling out their money. If many give notice, it could spark a rash of selling by funds looking to raise cash to cover withdrawals.”

[Moonman62]

Are you a parrot with computer access?